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tv   The David Rubenstein Show Peer to Peer Conversations  Bloomberg  October 22, 2017 2:30pm-3:00pm EDT

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♪ david: when you told people you would raise a $100 billion fund, did they tell you you were crazy? masayoshi: some people said. [laughter] david: did you suffer discrimination in japan? masayoshi: that made me stronger. david: how did you feel losing $70 billion of net worth? masayoshi: i was so close to fall down from the cliff. we almost went bankrupt. somehow, i survived. >> would you fix your tie, please? david: well, people would not recognize me if my tie was fixed, but ok. just leave it this way. all right. ♪ david: i don't consider myself a journalist.
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and nobody else would consider myself a journalist. i began to take on the life of being an interviewer, even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? you are clearly one of the world's most successful technology investors and one of the world's most successful businessmen. let me start by asking you about a fund you are now raising, the vision fund. it is supposed to be a fund of $100 billion? masayoshi: yes. david: that would be the biggest fund ever raised. so, when you told people you were going to raise a $100 billion fund, did they tell you were a little bit crazy? masayoshi: some people said. [laughter] david: you had a meeting with the matter was the deputy crown prince of saudi arabia, who is now the crown prince of saudi arabia. as i understand the story, you went in and in one hour convinced him to invest $45 billion. masayoshi: no, no, it is not true.
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david: ok. [laughter] masayoshi: 45 minutes, $45 billion. [laughter] david: sorry, i apologize. masayoshi: $1 billion per minute. [laughter] david: what could you have said that was that persuasive to get $45 billion in one meeting? masayoshi: i said, you came to tokyo the first time. i want to give you a gift. i want to give you a tokyo gift, a $1 trillion gift. and he opened up his eyes and said, ok. now, it is interesting. so, i woke up him and said, here is how i can give you a $1 trillion gift. you invest $100 billion to my fund. i give you $1 trillion. david: but what is it you told people and what was the vision you gave them? masayoshi: well, one vision,
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which is singularity. singularity is the concept that the computing power, computer artificial intelligence past to mankind's brains. david: the singularity is the concept, that is the word means, that is the point at which a computer becomes smarter than a human brain. masayoshi: yes. today, already, computers are smarter than mankind at chess, or go, or weather forecasts. in some expert systems, the computer is already smarter.
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but in 30 years, most of the subjects that we are thinking, they will be smarter than us. that is my belief. david: let's go back and talk about your upbringing a bit. so, you are of korean descent. your grandfather came from korea and moved to japan many years ago. and your parents were born in japan. did you suffer discrimination
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growing up in japan? masayoshi: yes, i had some experience. but i feel now it was good. that made me, you know, stronger. to work harder. so, i had to prove that i am not different from any other guys. not inferior. so i had to work harder to prove the value. david: your family adopted a japanese name at one point. masayoshi: actually in japan, there was some period, the japanese government forced every korean to change to a japanese name. so, it was not their intention. we had to. david: you have to change? masayoshi: we have to change. that made me even more harder, because i was treated that i was hiding something. it was even tougher. david: you did not grow up in tokyo. you grew up in a relatively small town in japan. is that right? masayoshi: yes. in the southern part. david: the southern part of japan. it was said you are interested in meeting the head of mcdonald's. why were you interested in meeting the head of mcdonald's? did you like mcdonald's food, or what was it? masayoshi: he wrote the book, and the book became the bestseller. i was so impressed and said, oh my god, this is great! and the guy who wrote about it must be great! [laughter] david: so, how old were you when you wanted to meet him? masayoshi: 16. david: 16. so, you managed to get a meeting
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with him. masayoshi: i called his assistant, long-distance call. back then it was so expensive. i made almost 100 calls -- 60 calls. and i said, this is my name, i am a student, and could you ask him to spare me some time? could you ask him? she said oh, i will try, but he is not going to meet with the student. i said well, don't decide by yourself. let him decide. right? [laughter] masayoshi: so i spoke with the different assistants so many times. and they don't give me the right answers so i said, this is a waste of my telephone bill. so, i flew into tokyo and said, i came because the phone call was becoming more expensive than an air ticket. [laughter] david: so, what happened? masayoshi: so i said, tell him exactly the way i said it. you don't have to look at me. you don't have to talk to me. you can keep on working whatever you are doing. i just want to see his face. [laughter]
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masayoshi: for three minutes. david: ok. masayoshi: so i am not bothering him. i am just so impressed and respect him, i want to see him. and if you tell him that i am not going to bother him, his time, his money. i am not going to damage his life, he said, ok. actually, he spent 15 minutes with me, talking face-to-face. david: he gave you some advice, which was to learn -- masayoshi: yeah, i asked him what business should i do? computer.
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that is the one. if i were you at your age at this time, you know, this is, don't look at the past industries. look at the future industries. that is the one, the computer industry, that is the one you should focus on. if i were you, that is the one, so i said, wow, great. david: ok. so, he gave you that advice, you were number one in your class and went to university of california at berkeley. when you were there you were not so much a student, but doing business on the side. masayoshi: well, i was a good student. but i said, five minutes i would allow, other than study. i have to make money. i want to earn $10,000 per month. and i would allow me, myself, five minutes a day. so, i asked my friends, is there a good job that i can earn $10,000 in five minutes a day? [laughter] masayoshi: my friend say, you are crazy. impossible. nothing like that. do want to sell drugs? [laughter] masayoshi: so i said, no, no, i don't want to do that. so i said, ok, what is the best, most efficient use of my time? it is the invention. the invention. i have to file a patent. if i get the patent, five
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minutes. if i focus, i can make some idea. so, i sent an alarm clock for five minutes. tick, tick, tick. in five minutes i said come, invention, come! [laughter] masayoshi: come! right? [laughter] masayoshi: so, i did that. david: and it worked? masayoshi: it worked. david: you invented a machine to help people translate languages? masayoshi: yes. the first one was an electric dictionary. many students use the electric dictionary. the first one ever made was by myself. david: first electric dictionary. and you sold it to sharp and made a lot of money. masayoshi: yeah, $1.7 million. david: so, what did you do with $1.7 million then? masayoshi: well, i used it to start softbank. david: did you move back? masayoshi: i did one more project and made another $1.5 million. so, i made $3.2 million in 18 months. so, that is better than $10,000 per month.
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david: right. masayoshi: i told that to my friends, look, i got $3.2 million, and i kept working only five minutes a day, as i promised you. david: then after you graduated, and you made these successful inventions, you moved back to japan. why did you move back to japan? not that it is not a great place to move back to, but you are in the silicon valley area. why not stay there? masayoshi: i created a company and my employees asked me to stay. but i said no. i promised to my mother when i decided to come study in the states. she was crying in the airport, and i said, no, don't cry, mom. after i graduate from school, i will come back, i promise. she said no, you don't come back. this is forever. farewell. no, i promise you, don't worry, i promise you. so, i kept my word. david: recently, you did the biggest investment you have ever made in a company called a.r.m.
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masayoshi: they have 99% market share for any smartphone you have in your pocket. i think the company is going to be more valuable than google. ♪
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♪ david: all right, so you moved back to japan and started a company called softbank. what was softbank's purpose? what kind of business were you in? masayoshi: so, that was the beginning of the time of the personal computer got started. so, but there was hardware, not enough software. so, i aggregate all kinds of software from the small software houses.
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and i wholesale to the pc stores. so, it is like a bank. software's bank, not the money bank. the software wholesaling, storing in my warehouse, but it is like a concept. david: so, it is very successful, softbank's stock was going up. and then you decide at some point to start investing. one of the investments you made is considered by many people to be the most successful investment in the history of mankind. you invested roughly $20 million in alibaba. at the time it went public, it was worth roughly $90 billion. so, $20 million to $90 billion is a return of 4500%.
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now, jack ma is a very distinguished individual, and now one of the most successful entrepreneurs in the world. what is it that made you feel this was worth putting in $20
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million? masayoshi: well, he had no business plan. and zero revenue. employees, maybe 35, 40 employees. but his eyes was very strong. strong eyes. shining eyes. i could tell from the way he talked, the way he looked, he has the charisma. he has a leadership. but his business model was wrong. it was the way he talked, the way he can bring young chinese people following him. david: before yahoo! was so famous, you made an investment in it that was very successful. how did you hear of yahoo!? masayoshi: yahoo! u.s. was still private, 15 employees. and i convince them to take $100 million of our investment. so, at the time, they grew from 15 to 35 people. 35 people. and we invest $100 million to own 35%. and actually, went ipo and made a great return. at the same time, i convinced them to start a joint venture, the directors of the board of yahoo! japan, to start another company. we put $1.2 million, they put $0.8 million. $2 million startup capital. we owned a 60%. david: let's talk about one big mistake you made overall. obviously, you are very successful in almost everything you touch, but you were making a lot of internet investments around the turn-of-the-century, 1999-2001. the market went down in the tech crash, and it is said that you personally lost $70 billion of net worth. the greatest loss that any human being has ever suffered financially. so, how did you feel losing $70 billion of net worth? masayoshi: one year before that,
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actually, my personal net worth was increasing $10 billion per week. [laughter] masayoshi: for three days, i became richer than bill gates. david: wow. did that upset him? [laughter] masayoshi: no, the four i told anybody else, our stock started crashing. david: ok. [laughter] masayoshi: so, six months after that, our share price went down 99%. so, we almost went bankrupt. and somehow, i survived. david: you rebuilt your business. and among the things you did, was you bought well-known companies. you bought vodafone's mobile telephone business in japan. masayoshi: at that time, i said, now is the time to go to the next stage, which is the internet will become mobile internet. so, i had to either get the license from the government, or the spectrum, or acquire vodafone japan.
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and first, i applied for the license to the government. and the government said no, there is no more spectrum. i actually sued the government. for one year, a big fight. but then vodafone japan became available. $20 billion. i have $2 billion. so, $18 billion short. david: where did you get the money? masayoshi: so, i convinced the bank, you know, that the vodafone japan, i am going to turn around and become successful and a great cash flow. they believed me and lent the money.
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david: and they did? masayoshi: they did. david: and it turned out to be very successful. regionally, you did the biggest investment you have ever made in a company called a.r.m., which is a semiconductor manufacturer
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in london. why did you spend $31 billion buying a semiconductor manufacturer when many people think that is not the future? masayoshi: it was actually $34 billion. david: 34? masayoshi: yeah. it is not the manufacturer. it is the design house. they design all the chips. they have 99% market share for any smartphone you have in your pocket.
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♪ david: now, in the future, you are a big believer in robots. it is your view artificial intelligence is a good thing and ultimately will not hurt humanity, is that correct? masayoshi: right. david: but you don't worry that robots could become so smart that they could wipe out humanity, as some people worry? masayoshi: yeah, there is a danger of that. there is a danger. but if you look at the mankind's history, people were killing each other with many battles among different tribes and so on.
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but today's world, we don't have that kind of things in everyday life. we are more civilized. so, when the robots' super intelligence goes beyond mankind's intelligence, and they say fighting is not an efficient way of living, that harmony is better. it is more social. so, we are going to live in harmony. they think about us. they help us. and they tried to amuse us, and have a good love for each other. david: what gives you the greatest pleasure in the world? masayoshi: the thing is, you know, i have a vision. i have a vision of singularity. that is really coming. so, we created vision fund.
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we go and change the world together, and create a better world. a better world for human living. so, that excites me. you know, thinking about what is the future? how we can change the lives of people for the better of humanity? so, that people do not need to die for unnecessary reasons, like having accidents, or having the disease, or having the disaster. so, to protect humans from all that sadness is a good thing. right? so, imagining those things, and investing, and creating a group, and having great products, great solutions, is exciting. david: and today, you come back and have enormous net worth by any human standard, one of the richest men in the world. what do you do with all this money? masayoshi: well, i have not decided what to do. david: you have not decided? but you are 60 years old, you have to decide at some point.
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masayoshi: deciding how to spend with respect is more difficult than making money. that was a headache i had. when i became so rich -- david: you were the richest man, you had that headache, lost that headache and now you have it again, right? [laughter] david: any plans of doing this for the next 20 years? masayoshi: at the age of 19 i created my 50 year life plan. and in my age of 60's, between 60 and 69, i would decided my successor, and have my successor keep on running it. so, in my next 10 years, i have to do that. but even after i find a successor and give him a baton to run as a captain of a ship, i would probably stay working with him, coaching him. and as long as i live, probably, i cannot forget about this excitement. david: your parents are still alive. they must be extremely proud of you. masayoshi: they actually are very proud of me, and very happy. we are a happy family. and, you know, we don't live together, but they call me occasionally. and, you know, my dad is a funny guy. he has unique ideas, crazy ideas. and he always calls me and says, masa, i have an idea. you have to do this. he knows everything i am doing. and he is very creative, very smart. he talk about business to me all the time. david: now, you are japanese, but you are of korean descent. but you are different from most japanese business people that are very consensus-oriented, not as entrepreneurial as you are. has that been a challenge for you in building up your business in japan? masayoshi: yeah. lots of challenge, but the uniqueness is actually good.
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you know? if the pack of other people go this way. i am unique. i have more opportunities. so, the difficulty, if you flip over, becomes an advantage. david: one final question. if you could live with your life over, is there anything you would do differently than you have done? masayoshi: i may. but this is the life i am enjoying so much. that i would love to do it again. uh i was so lucky. i was so close to fall down from the cliff. i do not know how i could do it twice. has that been a challenge for you in building up your business in japan?
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masayoshi: yeah. lots of challenge, but the uniqueness is actually good. you know? if the pack of other people go this way. i am unique. i have more opportunities. so, the difficulty, if you flip over, becomes an advantage. david: one final question. if you could live with your life over, is there anything you would do differently than you have done? masayoshi: i may. but this is the life i am enjoying so much. that i would love to do it again. uh i was so lucky. i was so close to fall down from the cliff. i do not know how i could do it twice. [laughter] david: wow. masayoshi: but this is definitely an exciting life. i am having fun. ♪
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♪ emily: i am emily chang. this is "best of bloomberg technology," where we bring you all our top interviews from this week and -- in tech. my exclusive interview with arianna huffington from the wsj tliv tech conference in laguna beach, california. plus, we will sit down with facebook's head of messaging to find out how he plans to make it the default messaging app. after a summer of disappointment at the box office, disney

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